Mastercard Foundation works with visionary organizations to provide greater access to education, skills training and financial services for people living in poverty, primarily in Africa. As one of the largest private foundations its work is guided by its mission to advance learning and promote financial inclusion to create an inclusive and equitable world. Based in Toronto, Canada, its independence was established by Mastercard when the Foundation was created in 2006. For more information and to sign up for the Foundation’s newsletter, please visit www.mastercardfdn.org. Follow the Foundation at @MastercardFdn on Twitter.

Savings Groups at the Frontier

Summary

Savings Groups reach those rarely served by mainstream financial institutions. At weekly meetings, members deposit savings and take loans, and in the process build commitment, discipline and mutual assistance. Maximum transparency, a profitable structure for saving, access to small loans and an annual lump sum of capital are the hallmarks of the Savings Group methodology. The outcome: empowered groups, made up mostly of women, who manage themselves as tiny financial institutions. Today there are Savings Groups in 60 countries with more than 6 million members, the result of initiatives carried out by dozens of international and local NGOs.

Savings Groups at the Frontier explores the issues that will shape the future of Savings Groups. What are the costs, required inputs, and anticipated outreach of these groups? How does replication take place? How sustainable are the groups? Is it feasible to integrate financial and non-financial services? Are linkages to the formal system desirable? What is the impact of groups on members and their households? How can performance be managed? Not surprisingly, these issues mirror the preoccupation of the pioneers of microcredit. However, this book addresses them, not from the perspective of the financial institution, but in support of group members and savers who are managing their own financial services.

The discussions in this book carry on those begun at the Arusha Savings Group Summit held in Tanzania in October, 2011. The authors of these chapters, including Jeff Ashe, Hugh Allen, Joanna Ledgerwood, and Paul Rippey, solicited input from a wide range of practitioners both during and after the summit. They also are the pioneers of the movement and bring extensive experience to these pages.

This book is essential reading for all those concerned with extending financial services to the poor: NGO and microfinance managers, bankers, policy makers, researchers and students.

The book was launched on November 7 at the 2012 SEEP Annual Conference.

The book serves as a follow-up to the 2011 Arusha Savings Group Summit,and can be ordered here.

Introduction

Jeff Ashe and Candace Nelson

1.Savings groups and financial inclusion

Joanna Ledgerwood and Alyssa Jethani

2.Savings group outreach and membership

Susan Johnson and Silvia Storchi

3.Making it happen: Approaches to group formation

Paul Rippey and Hugh Allen

4.Thrift-led development

Kim Wilson

5. Pathways to change: The impact of group participation

Megan Gash

6.Performance monitoring

David Panetta

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